SMES' SECTOR ACCESS TO FINANCE: AN OVERVIEW

Through their contribution to the creation of added value and new jobs, the small and medium enterprises (SMEs) have a significant role in the economic and social development of a country. However, these enterprises are facing numerous obstacles that limit their performance, growth and development. Among the difficulties faced by SMEs, the access to finance is often reported as a major obstacle to the deployment and expansion of their activity. The access to finance is crucial for efficient allocation of financial resources and entrepreneurial development, which explains the major interest given to this subject both by the academic literature and the policy makers. The paper aims to highlight the difficulties faced by SMEs in securing financing resources, emphasizing the differences between countries and also between SMEs and large enterprises. Knowing the difficulties in SMEs financing is essential for policy makers in order to design and implement appropriate measures, which will help to improve the access to financing for these enterprises. Thus, another issue addressed, synthetically, in this paper aims the measures taken by public authorities in order to support the access to financing for SMEs. The research methodology used in this paper starts with a literature review in order to highlight the importance of the subject addressed in our research. The analysis conducted in this paper is based on data and statistics provided mainly by the World Bank surveys, by certain empirical studies and by the National Council of Small and Medium Sized Private Enterprises in Romania. Based on the methodology used, the paper indicates the difficulties in SMEs financing and the crucial importance of enhancing the public authorities concerns regarding their alleviation, especially by adopting measures focused on increasing financial development, which would ensure greater availability of financing for businesses and thus economic growth. The limited availability and even lack of statistical data regarding the SMEs financing situation from various countries, including Romania, impose certain limits to the researches in the field, which can be overcome as policy makers realize the vital importance of developing and monitoring specific indicators regarding the financing of this type of enterprises, such as the share of loans granted to SMEs, based on their size, experience and sectors of activity, that would be useful for public authorities, creditors and investors.Key words: Small and Medium Enterprises, access to finance, financing constraints, bank financing, support measures

EU NEW MEMBER STATES HOUSEHOLDS‘ BANKING INDEBTEDNESS AND IT‘S IMPLICATIONS: AN OVERVIEW

During the period previous to the crisis, most of the EU new member states fromour research (especially Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania,Poland and Romania) have registered a fast growth of the households indebtedness, whichhas lead to the extension of the vulnerabilities of this sector in front of some macroeconomicshocks. In this context, our research aim to especially comparatively underline the stylisedfacts about the indebtedness degree of the households from the analysed countries and themain effects generated by the fast growth of the banking debts of this sector. Through theundertaken analysis in our research we aim at underling the major importance which theinsurance of a sustainable household‘s indebtedness level has for the macroeconomic andfinancial stability of a country.households‘ indebtedness, new EU member countries, vulnerabilities, loans to households,global crisis

THE PARTICULARITIES OF THE MONETARY POLICY TRANSMISSION MECHANISM IN ROMANIA

The process of transmitting monetary policy impulses to the real economy presents o series of particularities from one country to another, mainly because of the diversity of financial systems. Thereby, the functionality of various monetary policy transmission channels is significantly influenced by the specific features of each country's financial system. The objective of this paper is to highlight some of the key features of the monetary policy transmission mechanism in Romania, taking into consideration the dominant role of the banking sector in the national financial system.monetary policy, transmission mechanism, interest rate channel, credit channel

A Cross-Country Analysis Regarding the Impact of the Recent Global Crisis on the Banking Sector

The current global crisis has had tremendous effects on the banking sectors from the new EU member countries. In this context it becomes important to analyse how the crisis has affected these banking systems and also how the monetary authorities from these countries have reacted in such an adverse situation in order to ensure the macro-stability and the re-launch of the lending process. In order to achieve this, firstly we have reviewed the academic literature on this subject, in order to avoid any overlap in our research and to ensure the originality of our undertaking. Secondly, using a quantitative approach, we have comparatively analysed the effects of the economic and financial crisis on the banking systems from our panel

Constraints on Bank Lending to SMEs from Romania and Supportive Measures

The access to finance is indispensable for the efficient allocation of capital and the enterprise development. However, when compared with large enterprises, small and medium enterprises face many difficulties when pursuing to procure financial resources. In Romania, the financial system is focused on banks so bank loans have an overwhelming share from the resources of external finance for SMEs. However, these companies face many obstacles in terms of applying for bank loans. Thus, we may notice that some banks refuse to grant loans or increase interest rates for operational SMEs that do not offer adequate guarantees or do not have a credit history, because they have just started their activity or they have a degree of solvency that does not fall into the limits imposed by the banks in question. In crisis conditions, SMEs face increasing difficulties in contracting bank loans because the deteriorating macroeconomic environment and the uncertainty about the macroeconomic outlook causes banks to show a greater reluctance in lending to these enterprises. Our paper aims to highlight the main constraints faced by SMEs in accessing bank loans, the implications of the current crisis on SMEs' access to bank loans and the measures taken by public authorities to support bank lending to these enterprises

Assessing the Role of Access to Finance for Young Potential Entrepreneurs: The Case of Romania

The significant role played by youth entrepreneurship for the economic growth of countries has shift the attention of researchers to the potential entrepreneurs, and how to stimulate the enter on the market of new and innovative individuals which might have positive effects on economic development. The present research is conducted to identify the influence of some characteristics of business environment and of access to financial resources on entrepreneurial intentions of faculty students from one of the largest universities of Romania. We conducted the study on a sample of undergraduate and master students, by applying a questionnaire. The main objectives of this paper are to analyze how the young potential entrepreneurs perceive the access to finance for start-ups and if this factor would be a significant predictor of the decision to become entrepreneurs of the students. In addition, our study discusses how policy makers could provide support for young people to create innovative businesses, from a financial perspective. Our findings show a high level of entrepreneurial intentions among the interviewed students, but also that easy access to financial resources is the most important obstacle identified by the students with entrepreneurial intentions. Young entrepreneurs encounter significant obstacles in trying to obtain the necessary financial resources because they do not have a market history or sufficient guarantees. Access to information and fewer business regulations were also identified as factors with a significant contribution on the entrepreneurial orientation of youth. The implications of the study are significant for potential policy intervention, because emphasize the need of the policymakers to stimulate young entrepreneurs by promoting policies that allow young entrepreneurs greater access to finance. Keywords: young entrepreneurs, potential entrepreneurs, entrepreneurial intentions, access to finance, business environment, university student

Implications of the inflation targeting strategy in some of the European Union member countries

Taking into consideration the necessity of stabilising the inflation rate at a level consistent with an economic policy strategy that assumes Romania will join the euro-zone at the earliest date possible the paper aims to underline the main aspects related to the implementation of the inflation targeting strategy in Romania by realising a comparatively analysis with the experience of other former socialist countries, like the Czech Republic, Hungary and Poland, which have successfully implemented this strategy, with good results in the disinflation process. The results of our paper highlight that the medium-term perspective of the monetary policy based on a direct inflation target lead to the enhancement of the flexibility of Romanian monetary policy in response to unexpected events and supported the preservation of low inflationary expectations, thus building up favourable foundations for high economic growth, despite the fact that the inflation rate hasn’t been yet stabilised at a low level in order to fulfil the inflation criterion, which is one of the conditions for euro-zone membership, this still representing a challenge for the Romanian authorities

Access to Finance of SMEs in CEE Countries and Supportive Measures

The access to finance is very important for the proper functioning and development of the enterprises. But, unfortunately, the access to finance is one of the major problems faced by the SMEs from all the European Union countries. Moreover, the recent financial crisis has brought even more challenges for these enterprises, because the deteriorating macroeconomic environmentand the uncertainty about the macroeconomic outlook caused creditors to show a greater reluctance in lending to these enterprises.Thus, the objective of our paper is to analyze the problems faced by the SMEs from ten Central and Eastern European (CEE) countries when trying to obtain the financial resources they need in current times, after the recent financial crisis. Another objective is to highlight the reforms adopted by these countries to sustain SMEs financing.The main findings of our paper are the fact that the current financial crisis had major negative implications on SMEs' access to finance and the measures taken by the decision makers to support lending of these enterprises are not enough, they must extend, in order to achieve a level of the access to finance of SMEs similar to the one in the developed European countries

Economic Performance of the SME sector in CEE Countries: an Empirical Investigation

Small and medium enterprises are an important part of a country’s economy and are a significant source for creating value added, employment, innovation and economic growth. Because of this improving their performance is a major concern of the specialists in the field. Through this paper we intend to evaluate the evolution of the SMEs performance between 2008 and 2014, but also to determine the factors that are influencing the growth of the value added of SMEs in the Central and Eastern European countries. In order to achieve the objectives proposed we use as methods the comparison of indicators and multiple linear regression models. The results obtained show that a part of the considered macroeconomic performance indicators, such as: total tax rate, exports of goods and services and private final consumption are statistically significant and have a strong influence on the SMEs performance. Also we observe important differences according to firm size

Real Convergence and European Integration with Focus on the New Member States

Our paper aims to analyse the dynamics of real economic convergence and the impact of several macroeconomic and institutional factors on this process, within the EU countries for the period 1995-2018. Employing cross-sectional and panel data techniques, this paper examines both the level and dynamics of absolute and conditional convergence within the EU28 countries and identifies key drivers of economic growth within the EU28 and subsequent groups (the EU15 versus New EU Member States group), by taking into consideration the impact of the recent global economic crisis. We find that the real convergence process is quite uneven and unstable over the 1995-2018 period. Our results confirm the negative effects of the recent global economic crisis on per capita GDP growth, suggesting a weakening of the convergence process at the EU28 level, especially at the level of New EU Member States. In addition, we find that investment, the openness of the economy and the quality of the institutional framework represent the main drivers of real convergence within the EU countries.JEL Codes - F43; F45; C3